Innovative ways are needed to improve quality of treatment for substance use disorders (SUDs), since it can be effective but is not always successful. Performance-based contracting (PBC) aims to align treatment program incentives and purchaser goals to drive high-quality care, yet is uncommon in drug abuse treatment systems. Because improvements will require changes by programs, clinicians and staff, it may be beneficial to incentivize these groups to work together. Design features are paramount in the effectiveness of P4P, yet few controlled trials of different incentive designs have been conducted and open questions remain on particular design features that contribute to effective systems. In 2007, Maine implemented a 2nd-generation PBC system with financial incentives for outpatient programs that receive federal block grant funding. Using Maine as a laboratory, we go beyond evaluation of an SUD treatment PBC to focus on unintended effects and outcomes; test a payment design that rewards clinicians/front-line staff for program performance by sending quarterly checks directly to clinicians/staff whose program meets their targets; and delve into response to incentives by both programs and clinicians, to understand how treatment programs and clinicians adapt organizational, management and clinical practices due to such incentives. The proposed study, conducted in collaboration with Maine's Office of Substance Abuse, will use administrative data and data collected from program interviews and clinician/staff surveys, incorporating multilevel modeling and a difference-in-difference approach. PBC is a significant change in payment design and may affect how SUD treatment services are delivered. As prevalence of PBC and other forms of P4P continue to increase, it is critical to understand how programs respond to PBC initiatives. This ability to focus on the black box of response to incentives is a unique and innovative aspect of the proposed study. Aims 1 and 2 use retrospective data from the ongoing Maine PBC that began in 2007. For Aims 3 and 4, we overlay a new approach to how incentives are distributed at a program level and examine this with a randomized design. Specifically, we aim to: 1. Determine if the PBC improved the rewarded measures of access and retention and determine what, if any, positive or negative unintended effects stemmed from the PBC. 2. Examine how client outcomes were affected by the PBC, controlling for adverse selection if identified, and determine associated organizational factors. 3. Test in a randomized trial at the program level whether the addition of clinician group incentives, paid directly to clinicians and front-line staff to reward overall program performance as defined by the PBC, improves program performance. 4. Determine what changes, if any, are implemented by programs (e.g., quality improvement initiatives) or by clinicians (e.g., outreach to clients) after introduction of incentives. PUBLIC HEALTH RELEVANCE: Maine's 2nd generation performance-based contract (PBC) for treatment of substance use disorders allows a nuanced study of a relatively new way to drive quality of treatment, and offers an opportunity to test new incentive designs. As PBC becomes more common, it is essential to understand program and clinician response, unintended effects, client outcomes, and interactions with other initiatives. Both PBC and clinician group incentives may serve as important elements in the toolbox as purchasers and treatment systems strive to improve quality of care for clients with substance use disorders in a constrained fiscal environment.